OUTLOOK ’10: Industry faces challenges from Congress

29 December 2009 20:06[Source: ICIS news]

WASHINGTON (ICIS news)--The US chemicals industry will face a tough challenge in 2010 in trying to stop Congress from imposing an inherently safer technology (IST) mandate on producers as part of new antiterrorism security requirements.

The fact that 2010 is an election year could help - or hinder - industry’s efforts to avert what could be a game-changing shift in federal regulation of the chemicals sector.

The Senate is to begin deliberation early in the new year on legislation to update and make permanent the three-year-old Chemical Facility Anti-Terrorism Standards (CFATS), the first congressional mandate establishing federal control over security at some 7,000 ?xml:namespace>US chemical facilities thought to be under potential risk of attack by terrorists intent on creating massive off-site casualties.

The US House approved a CFATS replacement bill in early November 2009, HR-2868, the “Chemical and Water Security Act”.

That bill contained an IST provision that would authorise the Department of Homeland Security (DHS) to require a given chemical plant to implement changes in feedstocks, processes or even products in order to make the site less attractive as a target and less damaging to the community if attacked.

If a company refused to implement the IST-related operational changes required by the department, DHS could seek a court order to shut down the plant site.

The House bill originally contained a strong provision for private right of action (PRA), meaning that private citizens would have authority under the law to file suit against companies or plant operators they believe to be in violation of the security requirements.

That original private lawsuit clause also would have allowed citizen suits against the department in order to trigger enforcement action against one or more facilities.

However, in the final House bill, industry won a significant change with the private right of action provision all but eliminated.

Under the bill approved in the House, private citizens could petition the department for action on a specific plant site, but they could not file suit against either the DHS or individual plants or companies.

But the private right of action issue is not necessarily dead in the Senate, and that chamber also has strong senator advocates for an inherently safer technology mandate as part of a new site security law.

Earlier in 2009, his key staff members indicated that Lieberman does favour some sort of IST mandate and a level of access to the courts for private citizens concerned that the department might not be enforcing the antiterrorism security law adequately on facilities in their communities.

Another key player, Senator Frank Lautenberg (Democrat-New Jersey), also is expected to introduce his own bill to replace CFATS.

Citing the horrific consequences of the Bhopal chemical release and the heavy concentration of chemical plants in New Jersey, Lautenberg’s aides said that his bill would address an inherently safer technology mandate as well as private right of action.

Between the two of them, Lieberman and Lautenberg could ensure that the Senate measure to replace CFATS has a strong inherently safer technology mandate and broad authority for citizen suits.

Nonetheless, chemical industry officials think they have a good chance of winning over senators on both the IST and private action issues.

Scott Jensen, spokesman for the American Chemistry Council (ACC) on site security issues, noted that considerable improvements were made in the original House bill, saying that similar progress is possible in the Senate.

“In working with the House Energy and Commerce Committee, ACC was able to make improvements to the PRA provision to address our members’ concerns,” Jensen said, citing the final language allowing citizen petitions to the department but not broad lawsuit authority.

“We feel confident that we should be able to build on the same improvements in the Senate,” Jensen said.

The ACC also has hopes of educating senators on the IST issue.

“ACC continues to believe that an IST mandate is unnecessary because CFATS currently drives operators to consider and implement a wide array of security measures from process changes to hardening their facilities,” Jensen said.

Like the rest of the chemicals industry, ACC contends that the approach taken in the existing CFATS requirements is best: government sets a security standard that high-risk chemical facilities must meet, but producers chose what measures to take - perhaps including IST changes - to meet those federal criteria.

The mid-term elections scheduled for November 2010 might play to industry’s advantage, Jensen noted.

In any election year, members of Congress typically are reluctant to enact highly controversial measures that may be seen by voters as raising consumer costs or taxes or putting local industries and jobs at risk.

“While it is unclear what effect the elections may play,” said Jensen, “a number of the members of the Senate Homeland Security Committee come from states that have strong [chemical] industry representation.”

And other committee members might be equally uneasy about imposing measures that are ostensibly security-related but which might trigger operational changes in their home state industries that would mean job reductions or even facility shutdowns.

Jensen pointed out that Senator Susan Collins of Maine, the ranking Republican on the Homeland Security Committee, and panel member George Voinovich of Ohio “have been strong supporters of performance-based standards like CFATS that do not mandate specific security measures”.

“We’re optimistic about our chances in the Senate, where we expect more members will be interested in understanding our concerns over scoring points against us,” Allmond said.He too cited industry’s success in getting the citizen lawsuit provision eliminated in the House bill.

In referring to “scoring points”, Allmond was alluding to the fact that many in Congress are fond of making ringing declarations against the chemicals industry, playing on public fears of a Bhopal-like disaster.

He said he worries that the 2010 election could hurt industry’s efforts to modify both the IST and private right of action goals sought by bill sponsors in the Senate.

“Based on past history, the argument that chemical facilities are terrorist targets and threats to surrounding communities makes for a better sound bite and pre-election posturing,” Jahn said.

The argument that an IST mandate will cause economic hardship for companies and put jobs at risk is not as easily and readily articulated in 30-second video and audio clips on local television and radio stations, he said.

Jahn said he would prefer that Congress simply extend the existing CFATS regulation for another two years to allow those standards, requirements, site inspections and other measures to be fully played out, giving policymakers a more measured evaluation of the rules’ effects.

Congress did extend CFATS for one year.The statute was to expire in October 2009 under a three-year sunset provision in the original 2006 enabling legislation, but because Congress clearly was not going to be able to replace CFATS in time to meet that expiration deadline, the existing rules were bumped over to an October 2010 expiration.

But the mood in Congress does not bode well for a longer extension of the existing structure without changes.

The federal legislature is almost certain to have its will in enacting a new, updated and expanded set of requirements in 2010 for antiterrorism security at chemical plants.

Industry will have to work hard at educating senators in hopes of getting regulations that will enhance security without curtailing production.

As former DHS Secretary Michael Chertoff said in 2006: “The objective is to raise security in a way that doesn’t destroy the businesses we’re trying to protect.”